The Winklevoss Twins Have Mark Zuckerberg in Their Sights

Brothers Cameron and Tyler Winklevoss, whom Mark Zuckerberg once promised to “f--k . . . probably in the ear” over their claim that they generated the idea for Facebook, and who were subsequently immortalized in The Social Network, have long dreamed of getting even with their former Harvard classmate. And although the courts quashed their subsequent legal appeal after they settled with Zuck for $65 million—$20 million in cash, $45 million in Facebook stock—they may at long last have exacted some measure of circuitous revenge. Back in 2013, they invested $11 million of the settlement in bitcoin, or what they claimed was about 1 percent of the entire cryptocurrency’s dollar-value equivalent. “We have elected to put our money and faith in a mathematical framework that is free of politics and human error,” Tyler declared upon making the investment.

That election was regarded with skepticism: “To say highly speculative would be the understatement of the century,” Steve Hanke, an alternative-currency specialist, toldThe New York Times at the time. But the former Olympic rowers’ choice has paid off: after recent surges in the value of the cryptocurrency—last week bitcoin surged past $10,000 and now trades at over $11,000—the Winklevii are saidto be bitcoin billionaires in what is considered to be the first billion-dollar return made by any cryptocurrency investor. (When they first invested, bitcoin traded at $120.) Their digital currency exchange, Gemini, which they launched in 2015, is now used all over the world, although their attempt to create an exchange-traded fund for bitcoin was rejected by the S.E.C., citing the possibility of fraud.

Bitcoin’s meteoric rise may be showing signs of a bubble: last week its price dropped $1,000 in 10 minutes, plummeting below $10,000 just after hitting its over-$11,000 all-time high. Still, the twins’ early comments about bitcoin appear to have been prescient. “People say it’s a Ponzi scheme, it’s a bubble,” Cameron said in 2013. “People really don’t want to take it seriously. At some point that narrative will shift to ‘virtual currencies are here to stay.’ We’re in the early days.” Cryptocurrency mania has since overtaken mature financial markets, with major institutional investors looking for ways to gain exposure. Dozens of crypto hedge funds have sprung up. And bulls point to the fact that bitcoin, despite its nearly $200 billion market cap, still represents less than 2 percent of any other major asset class.

Their returns still pale in comparison to Zuckerberg’s, whose net worth hovers around $70 billion. But as the twins explained to my colleague Nick Bilton in an interview this summer, cryptocurrency may yet be more lucrative—and more transformational—than Facebook ever was.